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The Bank of England is expected to crack down on long-term mortgages, after a significant rise in the number of mortgages lasting 30 years or more.
The usual mortgage term is 25 years – in 2000, just 1.6% of mortgages were for 30 years or more, the Daily Mail reports.
However, by 2012, there had been a dramatic rise in the number of mortgages lasting 30 years or more to 27% of all new mortgages – more than one-quarter of new mortgages.
It is anticipated that the next available figures will show a further increase in the number of 30-year mortgages taken out in the UK.
Extending the mortgage period to beyond 25 years can make monthly repayments cheaper – but 30-year mortgages are more risky for lenders as the borrower ages or their circumstances change, including the risk of redundancy or not being able to afford mortgage repayments.
The Bank of England’s Financial Policy Committee is now expected to clamp down on 30-year mortgages, especially those which would extend beyond the normal retirement age of the borrower.
The International Monetary Fund has already indicated that the Bank of England should act to cool the UK property market – especially in London, where house prices have risen by almost 18% in the last year, compared with 9.1% across the rest of the UK.
There has also been a rise in the number of fixed-term mortgages borrowers are taking out. In 2013, a total of 80% of borrowers took out a fixed-term mortgage, compare with 64% the previous year.
Duncan Lewis Housing Solicitors
Duncan Lewis housing solicitors can advise on a wide range of housing matters for homeowners and rental tenants, including:
• Debt
• Disrepair (rental property)
• Housing benefit
• Housing possession
• Landlord & Tenant disputes
• Local Authority housing
• Mortgage repossession
• Unlawful eviction.
For expert help with housing law, contact Duncan Lewis housing solicitors on 020 7923 4020.